There are currently nearly 3 million HCV carriers in the U.S. (2% of the population) and an estimate 170 million people worldwide. The Centers for Disease Control and Prevention indicate that approximately 10,000 people died as a result of hepatitis-C infections last year and that, by 2010, the annual death toll will overtake that of HIV. The only licensed therapy for chronic hepatitis is interferon (IFN)-alpha, either alone or in combination with ribavirin. There are several side-effects related to these treatments, and the response rate is only in the range of 40%. Therefore, there is an urgent need for more therapeutic options. Using novel screening algorithms for HCV-replicon bearing Huh7 cells, two anti-HCV compounds were selected for further evaluation. These compounds inhibit the HCV replication without affecting cellular polymerases or mitochondrial functions. Funding from the combined SBIR phase 1 and 2 grant will be used to select the compound with the greatest potential for commercialization for the treatment of chronic HCV. The SBIR phase 1 component will determine the pharmacokinetics in two animal models, and will generate short-term efficacy data in chronic HCV-infected chimpanzees. Phase 2 will include advanced toxicological and early human studies.